EUR/USD supported on Dovish Fed - BTMU

FXStreet (Guatemala) - FX Strategists at the Bank of Tokyo Mitsubishi UFJ noted that the euro is likely to weaken but only modestly against the US dollar in the week ahead.

Key Quotes:

“We do not expect EUR/USD to break below pivotal technical support at around the 1.3500-level."

"The US dollar is likely to derive support in the week ahead from further evidence that the US economic recovery is strengthening in Q2. Another solid non-farm payrolls report is expected."

"However, the Fed’s dovish policy stance will likely still remain a dampener on potential upside for US yields and the US dollar in the near-term. A lecture by Fed Chair Yellen to the IMF may also garner some market attention."

"In contrast the euro remains on a weaker footing in the near-term after recent ECB policy easing. The release of the latest euro-zone inflation report for June may weigh on the euro in the week ahead if it reveals further evidence that disinflation pressures continue to build. However, downside risks for the euro appear only modest as the ECB is unlikely to announce further easing in the near-term."